Shareholder Resolutions to J-Power on emissions reduction targets and remuneration incentives

Resolution 1

Partial amendment to the Articles of Incorporation

Details of the proposal

The following clause shall be added to the Articles of Incorporation:

1. To promote the long-term value of the Company, the Company shall set and disclose a business plan to achieve science-based short- and medium-term GHG emissions reduction targets aligned with the goals of the Paris Agreement.
2. The Company shall report, in its annual reporting, on its progress against such targets at reasonable cost and omitting proprietary information.

Reason for the proposal

Long-term institutional investors in the Company see its corporate value depending upon a credible decarbonisation strategy and short-, medium- and long-term GHG emissions reduction targets aligned with the goals of the Paris Agreement and investor expectations.

While we welcome the Company’s intention to achieve carbon neutrality by 2050, the Company’s targets are not yet aligned with the goals of the Paris Agreement. In particular, the Company has presented no indicative schedule for the retirement of its coal-fired power assets and has instead presented a plan that involves capital expenditure into speculative technology prolonging the life of these assets. This presents a range of material financial risks to shareholders, including the risks arising from anticipated changes in GHG emissions-related public policy.

Setting science-based targets, and disclosing a business plan to achieve them, would best manage these risks and protect corporate value. A disclosure of the Company’s assessment of how material capital expenditure aligns with those targets in such business plan would assist shareholders.

Resolution 2

Partial amendment to the Articles of Incorporation

Details of the proposal

The following clause shall be added to the Articles of Incorporation:

The Company shall disclose, in its annual reporting, details of how the Company’s remuneration policies will incentivise progress against the Company’s science-based short- and medium-term GHG emissions reduction targets, at a reasonable cost and omitting proprietary information.

Reason for the proposal

Long-term institutional investors in the Company consider a direct linkage between remuneration and achievement of GHG emissions reduction targets to be in the Company’s interests, as an important mechanism to incentivise executive performance against decarbonisation goals and protect corporate value.